Trade activity

Strong trade ahead of festive spend

Trade activity improved in November, suggesting stronger retail activity for the festive season, the SA Chamber of Commerce and Industry (Sacci) said on Tuesday.

Sacci's non-seasonally adjusted trade activity index (TAI) increased to 57 in November from 52 in October.

Even if the TAI was adjusted for seasonal factors, the index was high, at 53 in November compared to 50 in October, said Sacci economist Richard Downing.

When compared to a year ago, the seasonally adjusted TAI was four index points higher.

"The improvement in the TAI in the last two months suggests stronger retail activity over the Christmas season," he said.

The sub-components of trade activity, apart from employment, turned positive in October, and the progressive trend continued into November, Downing said.

Following the labour disruptions in August and September, business-to-business trade recovered in November.

"The recovering sales and new orders that started in October remained vibrant in November 2012, but the build-up in inventories slowed marginally from 53 to 52," he said.

Supplier deliveries remained in positive territory in November, at 57 from 55 in October.

Sales and input prices did not change meaningfully between October and November, he said. Downing said the impact on expected prices of sales and inputs would be more visible in price indices for the next six months.

Sales prices were expected to increase by a further three index points to 68, which was 13 points up from July 2012. Input prices were expected to increase by two points to 75, which would be 12 points up from July.

However, the six-month trade expectations index (TEI) declined to 51 in November from 53 in October. This was the lowest figure for the TEI since June 2009.

"The uncertain circumstances in the South African economy and abroad, and growing domestic price pressures continued to lower the outlook for trade conditions in the first few months of 2013," Downing said.

Employment conditions in the trade environment eased in November and moved into positive territory as temporary seasonal employment opportunities became available in the trade environment.

In November, the employment index increased by four points to 51. Employment prospects also improved slightly, from 46 in October to 47.